The Property Ombudsman (TPO) have recently stated some concerns regarding four of the recent cases they have looked into. The issues are concerning the standards that are required of firms when using third-parties to help accumulate search reports.
The reason the announcement was made was to ensure that subscriber firms know that the search Code requirements apply to the use of third-parties.
For the sake of illustration, vague details are shown:
- TPO was essential to firms if they are unable to exhibit when they were in contact with the local authority by a third- party search agent to create a search report.
- The search report missed a recorded planning application due to an error by the third-party which was commissioned by the firm to provide the planning information.
- The report did not show the location of proposed developments accurately, and the firm had trusted a third party to acquire the information, which had not been registered with PCCB.
- The development has planning permission and the report did not correctly locate the site. The firm had used a third-party to obtain the report. The third party went ahead and used a post code instead of a planning reference when confirming the location of the proposed development.
PCCB Compliance Note CN02C necessitates that firms provide declaration in search reports of “the sources of information used in compiling the report which is bespoke to the relevant data providers”, and involves that “the firm must also ensure that it has internal systems in place to record a greater level of detail on the type of source and to demonstrate due diligence if a complaint is raised or during a compliance check”.
It should be stated that the above requirements are also applied to any third-parties that are involved by subscriber firms to create reports or any information that would be included in the reports. Any internal systems should be including a record of the date the information was obtained, as well as the degree of the investigations undertaken.
The basis of the search code is that searches must…
“Provide complete search results based on a search of all legitimate, commercially and readily available sources”.
This also goes for when subscriber firms involve third-parties to complete a search or for when a third-party gathers information for a search.
PCCB Compliance Note CN02A involves any subscriber firms to…
“Only contract with third party suppliers who adopt standards of practice and consumer protection which are comparable with those in this Code.”
“The requirement is designed to place an obligation on the Search Code subscriber to satisfy themselves that the suppliers they are working with are of an equally high standard. The simplest way to meet the requirement is to ask for Search Code subscription where appropriate – eg compilers – but there is no requirement to do so. If you do contract with non- subscribers, then you should carry out due diligence to satisfy yourself as to the provenance of the data, assessed the risk to the end user that it is up to date, whether the data has been stored appropriately and to ensure that the liability chain is intact and that there is no break in it. If the data provider does not retain liability for the data, then you must undertake due diligence to check its accuracy and authenticity or assume liability.”
Compliance Note CN05 continues further that firms must…
“Take responsibility for resolving any complaints in relation to any third party supplier of search information or services engaged by the firm. This includes pursuing the complaint as necessary with that third party, on behalf of the customer. It is not acceptable for firms simply to refer the customer on to the third party”.
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